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First-time Buyers

Bank of Mum and Dad supported 7% of homeowners

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
27/07/2023

Rocketing house prices mean many aspiring homeowners now rely on family support to get onto the property ladder

The Bank of Mum and Dad is still a major lender, according to figures published today as part of the government’s latest English Housing Survey.

It found that 7% of owners bought their current house with help from a gift from a family member and 4% used an inheritance.

And it revealed that the number of first-time buyers who formed a brand-new household was 41%, the highest since 1998. This shows that, rather than renting a property on their own, they were previously living with parents or others before buying their first home (probably to save money).

The average age of first-time buyers was 30.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “For those who can afford to help, it’s brilliant to be able to give your offspring a good start in life. Given that the average age of a first-time buyer is 30, even with this help, it means without parents stepping in, we would have an even more rapidly aging rental population.

“It’s also often a far more positive stage to help than the 4% who have had to wait for an inheritance to get them onto the property ladder. There’s a reason why financial planners say it’s far better to give with a warm hand than a cold one.

But Coles warned that parents need to be aware of the costs involved.

“If they are dipping into the equity in their home, it may well mean paying their own mortgage for longer,” she cautioned.

“If they’re spending their savings, they need to be sure they still have enough for emergencies, and if they’re spending a lump sum from their pension, they need to be aware of the impact on their retirement income. Because while we always want to help our offspring, it’s not going to help anyone if we damage our own financial resilience irreparably in the process.”